The Baltic Dry Index (BDI) reflects the cost of shipping dry goods by sea and can be used as an economic indicator. It is calculated daily in London by the Baltic Exchange and covers shipments on routes around the world. The BDI can forecast economic trends and is available on shipping posts and websites.
The Baltic Dry Index (BDI) is an economic indicator that reflects the costs involved in shipping dry goods by sea. Despite the name, the Dry Baltic Index actually covers shipments on routes around the world. It is issued daily in London by the Baltic Exchange, an organization that traces its roots back to the 1700s. While many consumers have never heard of the BDI, it can actually be a very important tool in assessing the economic health and direction of business. economic trends.
When the Baltic Dry Index is calculated, brokers around the world are consulted to find out how much it would cost to book a cargo of dry crude products. This includes products ranging from grain to steel. The index is divided by ship class, and indices are provided for Capesize, Supramax, Panamax, and Handysize ships. It also averages costs across routes to give a more accurate reflection of overall trends; one route may be expensive for a variety of factors, while another may be relatively cheap and averaging the Baltic Dry Index gives a general picture.
Also known as the dry bulk index, the BDI gives people an idea of how the market for dry commodities is performing. This is an area of the market where there are not many active speculators, and the move can forecast economic trends, because in order to make consumer goods, companies need the dry raw materials used as materials. A rise in the Dry Baltic Index may suggest that more goods are being shipped, while a drop shows that there is less demand for these goods and likely signals that a domino effect will occur.
2008 marked a high point in the Baltic Dry Index, and this economic indicator lost a very high percentage of its value when the economic crisis of 2008 unfolded. At one point, the index was so low that it indicated that the chargers were barely breaking , even when it came to paying for the ships and crew. It wasn’t until January 2010 that the Baltic Dry Index began to experience a rebound that suggested promising economic trends, after numerous sessions of steady decline.
There are several places that people can find the latest quote on the value of the Baltic Dry Index. Shipping posts are usually a good place to start. Websites that offer comprehensive coverage of various indices around the world often have information on the BDI as well.
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